When one of the most famous planners in history says something about plans and timelines, you listen. And that’s exactly what Dwight D. Eisenhower, famed general behind the Normandy Invasion, once said: “Plans are worthless, but planning is indispensable.”
It might sound like a strange thing to hear from someone as meticulously detailed as Eisenhower. But when you see what he was getting at—that the act of preparation and planning is what generates the results, not the plan itself—you begin to see how setting your own exit targets and timelines for your business can change your life.
But what does the act of planning your exit look like? And how can you ensure you get the most from this process? Here are some important ways to set your own exit targets and timelines for your business, even if they don’t end up being 100% accurate.
Step One: Decide on a Scheduling Strategy
Even among public companies, only about 54% of businesses have a CEO succession plan in place. What does that mean for you? The mere act of deciding on a strategy—an important first step—will put you ahead of many companies. Whether you’re selling your business or simply considering retirement, your first step is to decide how to approach things.
You have two options here. Both are designed to get you thinking—but from opposite ends of the spectrum:
Start with big goals and work backward. For example, say you want to exit a business by 2025. Set a succession date of December 31, 2024. Now you have your date. What has to happen before then? Three months before then? Six months? Working backward from a goal date will help you find out how quickly you need to learn the big questions, like when you need a business valuation completed.
Start with small goals and work forward. This is the opposite approach, but it’s especially effective for anyone putting off succession planning. Even if you want to set an exit target for your business, there’s no reason you have to do it all in one day. If you so much as schedule a brainstorming session with your top brass to talk it over first, that’s a step in the right direction. Just make sure
that you always keep a list of next steps and that you progressively move toward a concrete timeline for exiting your business.
Step Two: Get the Essential Details Down in Writing
Remember what Eisenhower said: it’s not always the plan itself that’s important. You can edit a plan as you go. But it’s the act of sitting down and planning that will yield you results.
What do you do next? Now’s the time to start thinking about that plan in more concrete terms. Get the essential details down in writing. That might include:
Identifying successors and notifying them. You should have open and frank conversations with the people who might take over your business. Without this step, you’ll never know if they’re committed to your plan, either.
Detailing key training that may be necessary. Do you have to show someone the ropes? Are there areas of your business that you’ve always handled, but need to be handed off? If so, now’s the time to identify those. Create a schedule for training successors.
Write down key dates. For example, let’s say you need to consider knowing the valuation of your business three years before your exit date. You can remember to spend time on this with some calendar reminders labeled “how to determine the valuation of a business.” If you’ve chosen to work backwards from a primary goal, this can be an efficient way to plan.
Step Three: Prepare for Landing
As you move through with your plan, it can start to feel like “crunch time.” What seemed like a long way away starts to approach. And this can build up pressure and anxiety. To help alleviate these prepare-for-landing anxieties, make sure you incorporate the following steps:
Run your plans by other people first. The most important people to run your plans by? Your key players. You certainly wouldn’t want to surprise a vice president with a succession plan without even consulting them on it first. Instead, you’ll want to involve the key players at every stage of the process. These aren’t just empty words, either. You should ask them to provide feedback. Is there something that they thought of—such as needing your training—that needs to go into your plan? If so, it’s better to know about this sooner rather than later.
Write down a list of key dates. This is about setting exit targets and timelines after all. Even if you end up adjusting these dates, the mere act of writing these down in a cogent plan will have a positive effect on your ability to plan accordingly.
Step Four: Give Yourself a Parachute
Anyone who’s spent decades of their lives building a business can read the above and feel some trepidation. But here’s the beauty of planning: you can always call an audible. If you’re not sure you want to start succession planning in earnest yet, you can also try another form of planning. You can create exit targets and timelines for your business that will allow you to leave at a certain date, but not require that you do.
Call it giving yourself a “parachute.” If you can build a plan that allows you to exit a business—ensuring that the people in charge know how to do everything and know their responsibilities—then you’ll have the option of retiring at that point. But you don’t have to. This is a great way to start the process of succession planning without feeling like you’re writing your own will. View it as a plan that will enhance your flexibility and give you more options.
Most importantly, you can’t do any of the above without a valuation. Want an accurate valuation for your business before you set your plan? Start with a free valuation from GrowGrade.